II 

118TH CONGRESS 

2D SESSION S. 3940 

To amend the Internal Revenue Code of 1986 to provide for a first-time 

homebuyer credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 14, 2024 

Mr. WHITEHOUSE (for himself, Mr. HEINRICH, Mr. WELCH, Ms. SMITH, Mr. 

REED, Ms. BALDWIN, and Ms. ROSEN) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for a first-time homebuyer credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘First-Time Homebuyer 

5 Tax Credit Act of 2024’’. 

6 SEC. 2. FIRST-TIME HOMEBUYER REFUNDABLE TAX CRED7 IT. 

8 (a) IN GENERAL.—Section 36 of the Internal Rev9 enue Code of 1986 is amended to read as follows: 


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1 ‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 

2 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in3 dividual who is a first-time homebuyer of a principal resi4 dence in the United States during a taxable year, there 

5 shall be allowed as a credit against the tax imposed by 

6 this subtitle for such taxable year an amount equal to 10 

7 percent of the purchase price of the residence. 

8 ‘‘(b) LIMITATIONS.— 

9 ‘‘(1) DOLLAR LIMITATION.— 

10 ‘‘(A) IN GENERAL.—Except as otherwise 

11 provided in this paragraph, the credit allowed 

12 under subsection (a) shall not exceed $15,000. 

13 ‘‘(B) MARRIED INDIVIDUALS FILING SEPA14 RATELY.—In the case of a married individual 

15 filing a separate return, subparagraph (A) shall 

16 be applied by substituting ‘$7,500’ for 

17 ‘$15,000’. 

18 ‘‘(C) OTHER INDIVIDUALS.—If 2 or more 

19 individuals who are not married purchase a 

20 principal residence, the amount of the credit al21 lowed under subsection (a) shall be allocated 

22 among such individuals in such manner as the 

23 Secretary may prescribe, except that the total 

24 amount of the credits allowed to all such indi25 viduals shall not exceed $15,000. 


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1 ‘‘(2) PHASEOUT BASED ON AREA MEDIAN IN2 COME.— 

3 ‘‘(A) IN GENERAL.—The amount allowable 

4 as a credit under subsection (a) (determined 

5 without regard to this paragraph) shall be re6 duced (but not below zero) by the amount 

7 which bears the same ratio to the amount which 

8 is so allowable as— 

9 ‘‘(i) the excess (if any) of— 

10 ‘‘(I) the modified adjusted gross 

11 income of the taxpayer for the taxable 

12 year, over 

13 ‘‘(II) 150 percent of the applica14 ble Area Medium Income, bears to 

15 ‘‘(ii) 20 percent of the applicable Area 

16 Median Income. 

17 ‘‘(B) MODIFIED ADJUSTED GROSS IN18 COME.—For purposes of subparagraph (A), the 

19 term ‘modified adjusted gross income’ means 

20 the adjusted gross income of the taxpayer for 

21 the taxable year increased by any amount ex22 cluded from gross income under section 911, 

23 931, or 933. 

24 ‘‘(C) APPLICABLE AREA MEDIAN IN25 COME.—For purposes of subparagraph (A), the 


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1 term ‘applicable Area Median Income’ means 

2 the Area Median Income set by the Secretary of 

3 Housing and Urban Development with respect 

4 to— 

5 ‘‘(i) the area in which the principal 

6 residence is located, 

7 ‘‘(ii) the size of the household of the 

8 taxpayer, and 

9 ‘‘(iii) the calendar year in which the 

10 principal residence is purchased. 

11 ‘‘(D) REGULATIONS AND GUIDANCE.—The 

12 Secretary, after consultation with the Secretary 

13 of Housing and Urban Development, shall issue 

14 such regulations and guidance as are necessary 

15 to carry out the purposes of this subparagraph. 

16 ‘‘(3) LIMITATION BASED ON AREA MEDIAN PUR17 CHASE PRICE.— 

18 ‘‘(A) IN GENERAL.—The amount allowable 

19 as a credit under subsection (a) (determined 

20 without regard to this paragraph) shall be re21 duced (but not below zero) by the amount 

22 which bears the same ratio to the amount which 

23 is so allowable as— 

24 ‘‘(i) the excess (if any) of— 


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1 ‘‘(I) the purchase price of the 

2 principal residence, over 

3 ‘‘(II) the amount which is equal 

4 to 110 percent of the area median 

5 purchase price, bears to 

6 ‘‘(ii) the amount which is equal to 15 

7 percent of the area median purchase price. 

8 ‘‘(B) AREA MEDIAN PURCHASE PRICE.— 

9 For purposes of this paragraph, the term ‘area 

10 median purchase price’ means the median pur11 chase price for a home in both the area and the 

12 calendar year in which the purchase of the prin13 cipal residence takes place. 

14 ‘‘(C) REGULATIONS AND GUIDANCE.—The 

15 Secretary, after consultation with the Secretary 

16 of Housing and Urban Development, shall pro17 mulgate such regulations and guidance as are 

18 necessary to carry out the purposes of this sub19 paragraph, including for determining the area 

20 median purchase price with respect to different 

21 localities. 

22 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

23 any taxable year beginning in a calendar year after 

24 2024, each of the dollar amounts in paragraph (1) 

25 shall be increased by an amount equal to— 


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1 ‘‘(A) such dollar amount, multiplied by 

2 ‘‘(B) the cost-of-living adjustment deter3 mined under section 1(f)(3) for the calendar 

4 year in which the taxable year begins, deter5 mined by substituting ‘calendar year 2023’ for 

6 ‘calendar year 2016’ in subparagraph (A)(ii) 

7 thereof. 

8 Any increase determined under the preceding sen9 tence shall be rounded to the nearest multiple of 

10 $100. 

11 ‘‘(5) AGE LIMITATION.—No credit shall be al12 lowed under subsection (a) with respect to the pur13 chase of any residence unless the taxpayer has at14 tained age 18 as of the date of such purchase. In 

15 the case of any taxpayer who is married (within the 

16 meaning of section 7703), the taxpayer shall be 

17 treated as meeting the age requirement of the pre18 ceding sentence if the taxpayer or the taxpayer’s 

19 spouse meets such age requirement. 

20 ‘‘(c) DEFINITIONS.—For purposes of this section— 

21 ‘‘(1) FIRST-TIME HOMEBUYER.—The term 

22 ‘first-time homebuyer’ means any individual if such 

23 individual (and if married, such individual’s 

24 spouse)— 


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1 ‘‘(A) has no present ownership interest in 

2 any residence during the 3–year period ending 

3 on the date of the purchase of the principal res4 idence to which this section applies, and 

5 ‘‘(B) has not taken the credit in any other 

6 taxable year. 

7 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin8 cipal residence’ has the same meaning as when used 

9 in section 121. 

10 ‘‘(3) PURCHASE.— 

11 ‘‘(A) IN GENERAL.—The term ‘purchase’ 

12 means any acquisition, but only if— 

13 ‘‘(i) the property is not acquired from 

14 a person related to the person acquiring 

15 such property (or, if married, such individ16 ual’s spouse), 

17 ‘‘(ii) the acquisition is financed 

18 through a federally backed mortgage loan 

19 (as defined in section 4022 of the CARES 

20 Act), and 

21 ‘‘(iii) the basis of the property in the 

22 hands of the person acquiring such prop23 erty is not determined— 

24 ‘‘(I) in whole or in part by ref25 erence to the adjusted basis of such 


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1 property in the hands of the person 

2 from whom acquired, or 

3 ‘‘(II) under section 1014(a) (re4 lating to property acquired from a de5 cedent). 

6 ‘‘(B) CONSTRUCTION.—A residence which 

7 is constructed by the taxpayer shall be treated 

8 as purchased by the taxpayer on the date the 

9 taxpayer first occupies such residence. 

10 ‘‘(4) PURCHASE PRICE.—The term ‘purchase 

11 price’ means the adjusted basis of the principal resi12 dence on the date such residence is purchased. 

13 ‘‘(5) RELATED PERSONS.—A person shall be 

14 treated as related to another person if the relation15 ship between such persons would result in the dis16 allowance of losses under section 267 or 707(b). 

17 ‘‘(d) EXCEPTIONS.—No credit under subsection (a) 

18 shall be allowed to any taxpayer for any taxable year with 

19 respect to the purchase of a residence if— 

20 ‘‘(1) the taxpayer disposes of such residence (or 

21 such residence ceases to be the principal residence of 

22 the taxpayer (and, if married, the taxpayer’s 

23 spouse)) before the close of such taxable year, 


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1 ‘‘(2) a deduction under section 151 with respect 

2 to such taxpayer is allowable to another taxpayer for 

3 such taxable year, or 

4 ‘‘(3) the taxpayer fails to attach to the return 

5 of tax for such taxable year a properly executed copy 

6 of the settlement statement used to complete such 

7 purchase. 

8 ‘‘(e) REPORTING.—If the Secretary requires informa9 tion reporting under section 6045 by a person described 

10 in subsection (e)(2) thereof to verify the eligibility of tax11 payers for the credit allowable by this section, the excep12 tion provided by section 6045(e) shall not apply. 

13 ‘‘(f) RECAPTURE OF CREDIT.— 

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, if, during any taxable year 

16 before the close of the recapture period, a taxpayer 

17 disposes of the principal residence with respect to 

18 which a credit was allowed under subsection (a) (or 

19 such residence ceases to be the principal residence of 

20 the taxpayer), the tax imposed by this chapter for 

21 such taxable year shall be increased by the recover22 able amount determined in paragraph (2). 

23 ‘‘(2) RECOVERABLE AMOUNT.—For purposes of 

24 paragraph (1), the recoverable amount is the prod25 uct of— 


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1 ‘‘(A) 25 percent of the amount of the cred2 it allowed under subsection (a), multiplied by 

3 ‘‘(B) the number of taxable years remain4 ing in the recapture period as of the beginning 

5 of the taxable year in which the taxpayer dis6 poses of the principal residence. 

7 ‘‘(3) LIMITATION BASED ON GAIN.—In the case 

8 of the sale of the principal residence to a person who 

9 is not related to the taxpayer, the increase in tax de10 termined under paragraph (1) shall not exceed the 

11 amount of gain (if any) on such sale. Solely for pur12 poses of the preceding sentence, the adjusted basis 

13 of such residence shall be reduced by the amount of 

14 the credit allowed under subsection (a). 

15 ‘‘(4) EXCEPTIONS.— 

16 ‘‘(A) DEATH OF A TAXPAYER.—Paragraph 

17 (1) shall not apply to any taxable year ending 

18 after the date of the taxpayer’s death. 

19 ‘‘(B) INVOLUNTARY CONVERSION.—Para20 graph (1) shall not apply in the case of a resi21 dence which is compulsorily or involuntarily 

22 converted (within the meaning of section 

23 1033(a)) if the taxpayer acquires a new prin24 cipal residence during the 2-year period begin25 ning on the date of the disposition or cessation 


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1 referred to in paragraph (1). Paragraph (1) 

2 shall apply to such new principal residence dur3 ing the recapture period in the same manner as 

4 if such new principal residence were the con5 verted residence. 

6 ‘‘(C) TRANSFERS BETWEEN SPOUSES OR

7 INCIDENT TO DIVORCE.—In the case of a trans8 fer of a residence to which section 1041(a) ap9 plies— 

10 ‘‘(i) paragraph (1) shall not apply to 

11 such transfer, and 

12 ‘‘(ii) in the case of taxable years end13 ing after such transfer, paragraph (1) shall 

14 apply to the transferee in the same manner 

15 as if such transferee were the transferor 

16 (and shall not apply to the transferor). 

17 ‘‘(D) SPECIAL RULE FOR MEMBERS OF

18 THE ARMED FORCES, ETC.— 

19 ‘‘(i) IN GENERAL.—In the case of the 

20 disposition of a principal residence by an 

21 individual (or a cessation referred to in 

22 paragraph (1)) after December 31, 2021, 

23 in connection with Government orders re24 ceived by such individual, or such individ25 ual’s spouse, for qualified official extended 


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1 duty service, paragraph (1) and subsection 

2 (d)(2) shall not apply to such disposition 

3 (or cessation). 

4 ‘‘(ii) QUALIFIED OFFICIAL EXTENDED

5 DUTY SERVICE.—For purposes of this sec6 tion, the term ‘qualified official extended 

7 duty service’ means service on qualified of8 ficial extended duty as— 

9 ‘‘(I) a member of the uniformed 

10 services, 

11 ‘‘(II) a member of the Foreign 

12 Service of the United States, or 

13 ‘‘(III) an employee of the intel14 ligence community. 

15 ‘‘(iii) DEFINITIONS.—Any term used 

16 in this subparagraph which is also used in 

17 paragraph (9) of section 121(d) shall have 

18 the same meaning as when used in such 

19 paragraph. 

20 ‘‘(E) DISPOSITION OF RESIDENCE IN CON21 NECTION WITH CHANGE OF EMPLOYMENT.—In 

22 the case of the disposition of a principal resi23 dence by an individual (or a cessation referred 

24 to in paragraph (1)) after December 31, 2021 

25 in connection with a change of employment 


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1 which meets the conditions described in section 

2 217(c), paragraph (1) shall not apply to such 

3 disposition (or cessation). 

4 ‘‘(5) JOINT RETURNS.—In the case of a credit 

5 allowed under subsection (a) with respect to a joint 

6 return, half of such credit shall be treated as having 

7 been allowed to each individual filing such return for 

8 purposes of this subsection. 

9 ‘‘(6) RETURN REQUIREMENT.—If the tax im10 posed by this chapter for the taxable year is in11 creased under this subsection, the taxpayer shall, 

12 notwithstanding section 6012, be required to file a 

13 return with respect to the taxes imposed under this 

14 subtitle. 

15 ‘‘(7) RECAPTURE PERIOD.—For purposes of 

16 this subsection, the term ‘recapture period’ means 

17 the 4 taxable years beginning with the taxable year 

18 in which the purchase of the principal residence for 

19 which a credit is allowed under subsection (a) was 

20 made. 

21 ‘‘(g) ELECTION TO TREAT PURCHASE IN PRIOR

22 YEAR.—In the case of a purchase of a principal residence 

23 after December 31, 2022, a taxpayer may elect to treat 

24 such purchase as made on December 31 of the calendar 


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1 year preceding such purchase for purposes of this section 

2 (other than subsections (b)(4), (c), and (h)). 

3 ‘‘(h) TRANSFER OF CREDIT.— 

4 ‘‘(1) IN GENERAL.—Subject to such regulations 

5 and other guidance as the Secretary determines nec6 essary, a taxpayer may elect that the credit which 

7 would (but for this subsection) be allowed to such 

8 taxpayer with respect to the purchase of a principal 

9 residence shall be allowed to the mortgage lender 

10 with respect to such purchase and not to such tax11 payer. 

12 ‘‘(2) ELIGIBLE ENTITY.—For purposes of this 

13 subsection, the term ‘eligible entity’ means, with re14 spect to the purchase of the principal residence for 

15 which the credit is allowed under subsection (a), the 

16 mortgage lender which provides the mortgage to the 

17 taxpayer and has— 

18 ‘‘(A) registered with the Secretary for pur19 poses of this paragraph, at such time, and in 

20 such form and manner, as the Secretary may 

21 prescribe, 

22 ‘‘(B) prior to the election described in 

23 paragraph (1) and not later than at the time of 

24 such purchase, disclosed to the taxpayer making 

25 such purchase— 


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1 ‘‘(i) the value of the credit allowed 

2 under subsection (a), and 

3 ‘‘(ii) the amount provided by the 

4 mortgage lender to such taxpayer as a con5 dition of the election described in para6 graph (1). 

7 ‘‘(C) not later than at the time of such 

8 purchase, made payment to such taxpayer 

9 (whether in cash or in the form of a partial 

10 payment or down payment for the purchase of 

11 such principal residence) in an amount equal to 

12 the credit otherwise allowable to such taxpayer, 

13 and 

14 ‘‘(D) with respect to any incentive other15 wise available for taking a mortgage for which 

16 a credit is allowed under this section, including 

17 any incentive in the form of a rebate or dis18 count provided by the mortgage lender, ensured 

19 that— 

20 ‘‘(i) the availability or use of such in21 centive shall not limit the ability of a tax22 payer to make an election described in 

23 paragraph (1), and 

24 ‘‘(ii) such election shall not limit the 

25 value or use of such incentive. 


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1 ‘‘(3) TIMING.—An election described in para2 graph (1) shall be made by the taxpayer not later 

3 than the date on which the purchase of the principal 

4 residence with respect to which the credit under sub5 section (a) is allowed is made. 

6 ‘‘(4) REVOCATION OF REGISTRATION.—Upon 

7 determination by the Secretary that a mortgage 

8 lender has failed to comply with the requirements 

9 described in paragraph (2), the Secretary may re10 voke the registration (as described in subparagraph 

11 (A) of such paragraph) of such mortgage lender. 

12 ‘‘(5) TAX TREATMENT OF PAYMENTS.—With 

13 respect to any payment described in paragraph 

14 (2)(C), such payment— 

15 ‘‘(A) shall not be includible in the gross in16 come of the taxpayer, and 

17 ‘‘(B) with respect to the mortgage lender, 

18 shall not be deductible under this title. 

19 ‘‘(6) ADVANCE PAYMENT TO MORTGAGE LEND20 ERS.— 

21 ‘‘(A) IN GENERAL.—The Secretary shall 

22 establish a program to make advance payments 

23 to any eligible entity in an amount equal to the 

24 cumulative amount of the credits allowed under 

25 subsection (a) with respect to any mortgages 


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1 issued by such entity for which an election de2 scribed in paragraph (1) has been made. 

3 ‘‘(B) EXCESSIVE PAYMENTS.—Rules simi4 lar to the rules of section 6417(d)(6) shall 

5 apply for purposes of this paragraph. 

6 ‘‘(C) TREATMENT OF ADVANCE PAY7 MENTS.—For purposes of section 1324 of title 

8 31, United States Code, the payments under 

9 subparagraph (A) shall be treated in the same 

10 manner as a refund due from a credit provision 

11 referred to in subsection (b)(2) of such section. 

12 ‘‘(7) RECAPTURE.—In the case of any taxpayer 

13 who has made an election described in paragraph (1) 

14 with respect to the purchase of a principal residence 

15 and received a payment described in paragraph 

16 (2)(C) from an eligible entity, such principal resi17 dence shall be treated as a principal residence with 

18 respect to which a credit was allowed under sub19 section (a) for purposes of subsection (f).’’. 

20 (b) CERTAIN ERRORS WITH RESPECT TO FIRST21 TIME HOMEBUYER TAX CREDIT TREATED AS MATHE22 MATICAL OR CLERICAL ERRORS.—Paragraph (2) of sec23 tion 6213(g) of the Internal Revenue Code of 1986 is 

24 amended by striking ‘‘and’’ at the end of subparagraph 

25 (U), by striking the period at the end of subparagraph 


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1 (V) and inserting ‘‘, and’’, and by inserting after subpara2 graph (V) the following new subparagraph: 

3 ‘‘(W) an entry on a return claiming the 

4 credit under section 36 if— 

5 ‘‘(i) the Secretary obtains information 

6 from the person issuing the TIN of the 

7 taxpayer that indicates that the taxpayer 

8 does not meet the age requirement of sec9 tion 36(b)(4), 

10 ‘‘(ii) information provided to the Sec11 retary by the taxpayer on an income tax 

12 return for at least one of the 2 preceding 

13 taxable years is inconsistent with eligibility 

14 for such credit, or 

15 ‘‘(iii) the taxpayer fails to attach to 

16 the return the form described in section 

17 36(d)(3).’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply with respect to principal residences 

20 purchased after the date of the enactment of this Act. 

Æ 


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